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Symptoms of
Depression
If I were teaching a class on
financial pathology, I'd begin with a diagnostic decision-tree of
the type medical practitioners use to help them sort out one illness
from another. It would be a large series of "IF-THEN, ELSE"
kind of statements that once nested, would help a person ascertain
whether the economy was going to stabilize, or whether there's more
pain to come.
Here are just a few of my
collection of IF-THEN-ELSE statements that I use to sort through
financial developments:
-
IF credit is too easy THEN
malinvestment occurs, ELSE healthy investment atmosphere.
-
IF money injections exceed
actual economic growth THEN monetary inflation, ELSE
non-monetary inflation.
-
IF jobs decline, THEN
economic contraction ELSE questionable jobs data.
-
IF CPI flat, THEN grocery
bills stable, ELSE questionable CPI data
-
IF gold goes up, THEN
monetary inflation, ELSE gold price bubble
-
IF Fed bails out one bank
THEN expect more bank failures, ELSE Easter Bunny is real.
I offer these in no particular
order; the point is that you can only have so many indicators that
'we're not out of the woods yet' before even the most ardent deniers
will start bumping into trees.
---
The Federal Reserve, in bailing out Bear Stearns this week, has
given the astute investor something of a benchmark: Bear is
too big to fail.
It's not just that Bear's failure
would cause problems in the US - the problems could become
global/system (like they aren't already), leading the UK's Telegraph
to headline "Bear
Stearns exposed as a bank saddled with toxic sub-prime debt."
---
Someone who has studied longwave
economics might argue that the Kondratiev Wave might be going
through an economic revolution which will lead to the abolition of
the 50-70-year cycles in the economy. And, to be sure, there
is a case to be made.
But let's step back for a minute.
The whole 'purpose' if you can call it that, of an economic
depression is to wipe out a long period of accumulated interest,
malinvestment, and generally clean house so that a new foundation
for economic growth can be started on a solid foundation with little
(if any) debt.
The
Panic of 1873 and the
Great
Depression of the 1930's had some common elements which must be
considered, the largest of which is their occurrence about 10-years
after the end of a major war. Banks and brokerage firms
collapsing was the outward symptom in both cases, and there was a
monetary aspect in each - the Coinage Act in 1873, and the seizure
of gold in the early 1930's.
---
From a little reading here, we
might infer that IF we're into a Second Depression, THEN we should
see worthless paper, ELSE it may just be a normal recession.
The difficulty, however, is that
digi-dollars in today's world can disappear, leaving us without the
failed currencies and stock certificates which have accompanied past
hyperinflation events and crashes, such as the Weimar Inflation or
the Crash of 1929.
We're in a strange land where
"digis" can just go 'poof!' yet the effect would be the same.
Just no evidence laying around with which to paper the bathroom.
----
The Press seems to have gone
schizoid on the where the precious metals are heading in the current
environment. On the one hand, we read reports that "Analysts
see gold hitting US$1,200 in three months" (which I personally
expect to be classic understatement), but on the other "The
rising value of gold leads to a seller's rush."
So which is it? A simple
litmus test is provided by the markets. If the price is going
up for a commodity - such as gold in this case - then there are more
buyers than sellers. It's as simple as that.
Could it be that so many people
are flocking to jewelers to cash in gold that somehow the price will
be constrained? Forgive my skepticism, but I seriously doubt
it.
---
A simple reality check on gold's
upper limit comes from a visit to the Minneapolis Fed site where you
can plug in the momentary $850 high of gold in 1980 and see what the
equivalent price today would be, thanks to the Fed's printing money
faster than actual GDP growth: $2,224..
By the same token,
there's a historical 16:1 relationship between silver and gold.
With gold's close over $1000 this week, a quick punch of the
calculator says that today silver prices at its historical
16:1 relationship would price silver at $62.50 - and if applied to
gold at $2,224.03, then a case could be made for $140 silver.
While I DO NOT OFFER FINANCIAL
ADVICE, it's fair to say that in my commodity option account this
week I did something I rarely do: I 'chased' some options as
silver was going up. Linguistically, we could be looking at a
shining spring which starts next weekend.
What could drive prices so much
higher that I'd profit from such a move? The coming April/May strike
on Iran, of course. Even without improvement in the present
gold/silver ratio $1,200 gold (an Iran War slam dunk in my book)
would push silver over $25.
The elections in Iran seem unlikely to change anything, and with
the clock running out on his presidency, George and the neocons will
want to do something while they still have enough time in office to
prosecute the next war to its fullest.
---
I doubt that I'm the only one who
can use a calculator. If we really do see $1,200 gold in three
months, $21 silver would be a gold silver ratio north of 57 - which
to my way of thinking is absurd. So, either gold's got
to come down, or (as I'm betting) silver will go up. I told
you I was buying silver around $7 an ounce in 2005 and looking back
that call alone makes me feel like I've outgunned most of the hedge
fund 'geniuses' out there.
---
It's all really simple:
Before the New Worlders can move along to the next currency, this
one has to be destroyed. The easiest way to do that is with
the printing press - something the Federal Reserve has been very
good at. What cost one dollar in 1913 when the Fed
seized control of the nation's money now costs $21.7778.
So vast is the debasing of the
nation's money that it now costs - you're going to love this - 1.7-
cents to make and distribute a penny. More amazing?
Fox Business reported this week that a nickel costs 9.5-cents!
This is also why you shouldn't be
surprised to read about
copper theft in places like Portsmouth New Hampshire and
Panama
City Florida.
---
It seems to me that when the
metal in a coin is worth more than the face value of the coin, that
a country has serious economic ills that haven't been addressed.
I'll let you in on a little
secret: Figuring out that a currency crisis with paper and
digidollars has been a foregone conclusion to me every since
the April 17, 2007 press release from the US Mint that melting of
pennies and nickels would get you whacked with a $10,000 and up to
five years in jail.
I mean, how tough is this to
pencil out: IF coins cost more than their face value THEN
currency crisis ELSE coins have numismatic value.
Given that a penny doesn't have
numismatic value (there's enough of them that I doubt they will be
'collectable' any time soon, the inference is that we're heading for
what? How about death of the dollar? And with that,
buying precious metals (and converting paper into real goods as
quickly as possible) seems to make sense.
Not that it's a depressing state
of affairs - it's a depression state of affairs. But
like all depressions in the nation's past, there's usually a way to
play to win. The traditional route of thrift, living below
one's means, then buying bargains at the bottom of the cycle makes
sense to me. So when we get to the bottom in February 2010,
you'll see me taking out loans again and leveraging the next round
of inflation. Between now and then? I'll just be Mr.
Cheap and save my pennies.
Memes:
Them Winds
Our linguistic pals seem
right on the money with their exceptional winds forecast, as Atlanta
has been trashed by a tornado.
Diaspora
A reader caught the meme on TV
Friday night:
"I'm not up on the timeline (when
things are expected), but....
the word "migration" was mentioned
on the New Hour tonight. In a statement similar to "...in the
1930's there were great migrations of people from one area to
another. We haven't seen that yet.....but some are saying things
are that bad."
---
I'm not sure the parallels hold,
lots of that movement was due to the Dust Bowl. Less rail
traffic too. Seems to me people wouldn't really know where to go
(where they'd be better) nowadays. I'd guess we'd be more likely
to see migrations by whomever isn't washed away by the coastal
event."
Aha! Symptom of what?
Plane
Speaking
Here's just what I
need: A new Gulfstream 650 - so I can approach the speed of sound
while jaunting here and there. Pour
me another shot of Jack, would yah?
---
A little more affordable:
'smart glasses' that would make lost keys and phones a thing of the
past.
---
OK, more seriously,
fewer folks will be dreaming of such gadgets: Home foreclosures up
60% in February. Symptoms of depression.
--- snip and save section ---
Coping:
More on Car Cost
Accounting
My notes on car costs yesterday
drew some additional deep thinking on the subject:
George,
I've looked at this too. There are
additional costs per mile other than depreciation. Toyota,
Honda, Nissan face a straight depreciation to $2000 residual at
180,000 miles. For GM, Ford, Chrysler depreciate to $1000 at
150,000 miles.
Annual licensing: An older car in
some states, like Colorado where I live, is cheaper for annual
licensing: here $42 if your car is over 10 years old, no matter
what type or size, where a new SUV will set you back $900 in the
first year, $700 in the second, etc.
Insurance: An older car not worth
insuring for comp/collision will save 30%-40% on insurance.
Sales Tax: Sales tax on an older car
is less, usually by hundreds of dollars.
Leasing: If you lease a car, sales
tax is charged on both the interest AND PRINCIPAL portion of
your lease payment.
Obsolescence: This is the big one.
Given the expected change in technology and gas mileage over the
next 10 years, a new car had better pay for itself in 5 to 7
years, because all the iron on the road right now will be worth
zero $ at the end of that time. An older vehicle would be a lot
less to lose when it becomes obsolete.
Send snip and save items - anything that
you find a useful strategy to remain sane in an un-sane world - to
george@ure.net
--- end snip and save section ---
This week for
Subscribers to Peoplenomics:
13 Acres and Independence Part 5:
Education: You Bet
Your Life
This being Spring Break, let's postpone the actual developing, and
building of your 'next life' farm/ranch/habitat/retreat/sanctuary to
define the knowledge you'll need to make it really work, then plan to
acquire the knowledge in the most cost-effective way possible.
We'll tread on sacred ground again by discussing how Higher Ed often
SELLS useless (or very low value) knowledge in return for mountains of
student loan debt. But if you believe that a student loan will
secure you're future, you could be DEAD wrong. We begin with the
distinctions between schooling, knowledge and education, understanding
the pricing models of each, and build a plan to have the right mix of
knowledge for the future.
No, it hasn't escaped our notice that the subprime meltdown has
extended to student loans....
More for
Subscribers
Subscription
Information
Tell Your Friends
About This Site!
If you know anyone who is
interested in preserving the Constitution, fighting usury from
banksters, and shaking off consumer hypnosis, tell them about this
site.
Click here to send 'em an invite...
No Incumbents
Bumper Stickers
To
get your "No Incumbents in 2008" click here. They're just
$5. And no, that would not keep Ron Paul from running for the
White House he is not an incumbent for that office
having never held that job before, you see. And the
CONgressional folks? Don't even get me started... Primaries
this week in Texas and Ohio, to name just a few - eyes wide shut?
Mr. Cheap's Tricks
There are lots of ways
to save money on food, shelter, transportation, and such. It
just takes a little reading and one source of good ideas is
our handy ebook "How to Live on $10,000 a year or less.
Still just $10.
----
Last week's report is here. If for
back issues of this site, click here. (Goes back to 1997!)
----
I promised Elaine that I would unload some of my equipment, so if
you're looking for ham gear, especially the older tube-type (EMP
resistant) type, send me a note and I will send out the list of what
I'm selling off when I get it together. Click here
to
Put Me On Ham Gear List
Friday March 14, 2008
Truth Leak:
Headline of the Week
This is a marvelous Freudian -
hope they don't fix it...it's such a grand example of truth leaking
out:
"Federal Reverse Pledges to Supply Cash"
There, don't you feel better with
the Dow dumping on the bear Bear news (a fine double entendre,
one might observe)? Perhaps the only better question would be "Does
a bear dump in the Street?"
Unbelievable
Inflation Numbers
Well, this sure doesn't square
with my shopping experience, but here's the 'offishul' word:
The
Consumer Price Index for All Urban Consumers (CPI-U) increased
0.3 percent in February before seasonal adjustment, the
Bureau of Labor Statistics of the U.S. Department of Labor
reported today. The February level of 211.693 (1982-84=100) was
4.0 percent higher than in February 2007.
The Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W) increased 0.2 percent
in February prior to seasonal adjustment. The February level of
207.254 (1982-84=100) was 4.4 percent higher than in February
2007.
The Chained Consumer Price Index for
All Urban Consumers (C-CPI-U) increased 0.3 percent in February
on a not seasonally adjusted basis. The February level of
122.251 (December 1999=100) was 3.7 percent higher than in
February 2007. Please note that the indexes for the post-2006
period are subject to revision.
CPI for All Urban Consumers (CPI-U)
On a seasonally adjusted basis, the
CPI-U was virtually unchanged in February, following a 0.4
percent rise in January. Each of the three groups--food, energy,
and all items less food and energy--contributed to the
deceleration. The index for food at home, which rose 0.9 percent
in January, increased 0.3 percent. The moderation reflected a
downturn in the indexes for fruits and vegetables, for meats,
poultry, fish, and eggs, and for nonalcoholic beverages. The
index for energy turned down in February as a 1.9 percent
decline in the index for energy commodities more than offset a
1.7 percent increase in the index for energy services. The index
for all items less food and energy was virtually unchanged after
increasing 0.3 percent in January. The deceleration reflects
smaller increases in the indexes for shelter, for medical care,
for recreation, for education and communication, and for other
goods and services, and a decline in the index for apparel."
This may set off a screaming rally
because there was no change in the core rate that's all items less
food and energy because policy makers don't use those.
It clears the
way to ink up the Fed's printing press with lower rates.
Me? I've got plans to go bottom
fishing for precious metals options on the decline here.
PPT Plans
Often
called the Plunge Protection Team, the President's Working Group on
Markets has issued its report on how they plan to operate going
forward.
If you're a serious investor, you might want to read what amounts to
the PTB's roadmap here.
Rogers:
Lose the Fed
Jim Rogers, one of my commodity
trading heroes, says "This
man Bernanke just goes from bad to worse..." Me?
Inflation of commodities has been highly tradable! "A
collapsing currency is not good for the world..." says Rogers.
Good News -
Briefly
This may not last long, but there
are some headlines on the economic front besides the manically
reported CPI numbers which are not even remotely connected to the
lifespace most of us live in.
For example,
we read that the dollar has rebounded from recent lows against the
Euro. And if that doesn't send you falling to your knees
in a chorus of Hallelujahs,
how about the headline that oil backed off a bit from its record
highs? (You can get up now...it won't last.)
Maui Wowie
Gas at
$4 in the Hawaiian Islands. Some come to the mainland, bro.
Hunger Pangs
Here's a good background article on how food shortages can lead to
wars.
The Eggs Meme
The poisoned/eggs meme from
modelspace a while back is starting to pop: "Study
finds over 100 harmful contaminants in Main bird eggs..."
Seems (linguistically) like a lot more headlines and coverage of
this will follow, so we'll sit back and watch it build from here
into the MSM...
Taxaholics
Gathering
Probably the biggest story of the
day is the battle going on in CONgress over taxes. As the WSJ
Online headlines it: "Congress's
Votes on Taxes Set Stage for Election Battle."
Of course one thing we'll be
taking note of is whether the democorp and republicorp wannabes
actually show up and cast ballots.
---
As a side note, here's a ponder
for you: In this age of online encrypted banking and browsing
from cell phones, why doesn't Congress simply login and vote online?
Purely from an JR standpoint, if I had an employee who missed as
many votes as some of these folks, I'd have applied the
not-yet-famous Ure Principle of Management: Three Strikes and You're
Out.
---
Credit Where Due:
Idaho Senator Mike Crapo's at
least thinking about the issue of tax burdens.
On
his web site this morning he has an interest rap about the Tax
Foundation's "Tax Freedom Day" in 2007.
"Each
year
The Tax Foundation, a nonpartisan,
nonprofit tax research organization,
calculates the tax burden faced by
Americans using Tax Freedom Day. This
answers the question: What price is the
nation paying for government. In theory,
if all our earnings went first to taxes
starting January 1 each year, Tax
Freedom Day is the day on which we could
start keeping some of our earnings. In
2007, Tax Freedom Day arrived two days
later than in 2006. What's interesting
is that the tax relief enacted in 2001
and 2003 moved Tax Freedom Day up 12
days earlier, to April 18).
Tax
Freedom Day is calculated by dividing
the official government tally of all
taxes collected in a year by the
official government tally of all income
earned in the same year. It takes into
account federal, state and local taxes.
The Tax Foundation has been monitoring
fiscal policy in our country since 1937.
It is
distressing to realize that each year
taxes are taking more and more out of
the paychecks of working Americans.
For
example, in 1900, Tax Freedom Day came
on January 22, with taxes accounting for
just 5.9 percent of income.
By
1950, Tax Freedom Day arrived on April
1, and taxes took up nearly 25 percent
of income.
In
2007, Tax Freedom Day arrived on April
30, with taxes taking at 32.6 percent,
the highest percentage since 2000.
So, we
worked 120 days just to pay our taxes.
It took 79 days for federal taxes and 41
for state and local taxes. Here's how
that works out for the various taxes we
face:
-
43
days for individual income taxes (33
for federal; 10 for state)
-
30
days for social insurance taxes (29,
federal; 1, state)
-
16
days for sales and excise taxes (3,
federal; 13, state)
-
12
days for property taxes (0, federal;
12, state)
-
14
days for corporate income taxes (12,
federal; 2, state)
-
5
days for other taxes (2, federal; 3,
state)
-
And as
for the other expenses that we incur
each day:
-
62
days for housing and household
options
-
52
days for health and medical care
-
30
days for food
-
309 days for transportation
-
22
days for recreation
-
13
days for clothing and accessories
-
36
days for other expenses
-
If you
look at the report for state
information, the State of Idaho carries
one of the lighter tax burdens in the
country, coming in at 41st. Tax Freedom
Day for the state came on April 19,
eleven days ahead of the national Tax
Freedom Day and nearly a month ahead of
Connecticut's Tax Freedom Day of May 20.
"
Crapo may not be Ron Paul, but at
least he and his staff are looking at Tax Freedom Day.
Let me see: April 30th is four
full months out of 12. Hand me the calculator would you?
That means we're all working a
full one third of our lives to pay for government. And with
the next meeting of the Taxaholics, that's almost certain to
increase again.
Haven't we saved enough Daylight
and paid enough taxes to implement a Universal Four Day Workweek
yet?
--- snip and save section ---
Coping:
The Car Decision
I was having a discussion with a
buddy early this morning and we got to talking about cars.
Yeah - worst things on the planet to buy. And I told him that
anymore, the way prices have been backed up on most used cars, you
can buy a new car for about the same cost per mile as a used on.
"Look at the math," I told him.
And because it's interesting, let's run through a hypothetical car.
Suppose I wanted to buy a new
Porsche Cayman S. With a little shopping around I could
probably get the car for $60,000 equipped the way I want.
To get to my operating cost per
mile, I simply divide the cost of the car by 100,000 miles. In
this case, it works out to 60-cents a mile.
"Come on George, here's one on
CarMax that's used - and you can get it for $47,000 and it only has
20,000 miles on it," my friend countered.
"Run out the same numbers:
$47,000 divided by (100,000 miles less the 20,000 that are on it)
80,000 and you come up with 58.75 cents a mile. So for a penny
and a quarter a mile, you want to lose some warranty coverage and
inherit someone else's car? Thanks, but no thanks..."
---
Obviously, this is a 'dream car'
kind of discussion, but the technique works equally well with cars
like Toyotas and Nissans.
So the car buying recipe I have
is really simple, but it makes sense:
Take the Cost of New Car A
Divide by expected service
life. I think 100,000 miles is reasonable.
This is your operating cost
per mile for the new car.
Now, take the Cost of Used
Car B
Divide this by the same
service life minus the miles on the used car
This is your expected
operating cost per mile for the used car.
People who look at the
depreciation of a new car when they drive it off the lot are
correct. But, this further step - looking at operating cost
per mile over the expected service life of the car, is a much better
approach, in my view. While it's true that you'd take a
beating on front-loaded depreciation if you sold the car right away,
when you look at buying a car as a long term relationship (longer
than some marriages, come to think of it) then buying a new car is
sometimes just as good a 'deal' as an older car.
On the other hand, if you insist
on flipping cars, to 'roll in a dats da bomb' then a 1-3 year old
car might make sense. Or, just buy a stylin & profilin 'chine
you can live with for a while and plan to drive out 100,000 miles or
more before youi next one.
Something to ponder if you're
gong car shopping.
And in today's world, you might
want to have at least one car that's big enough to live in.
Street Level Economics
Speaking of cars and such:
George:
A revealing 'man in the
street' dialogue yesterday, while pumping gasoline into my
Honda Accord in suburban Chicago:
A well-coiffured middle-aged
man, wearing a Northwestern University sweatshirt and
driving a back-model, though well-maintained Jeep
Cherokee, flagged me down as I was walking to the register to
pay for my $20 worth of fuel (6.5 gallons? Dunno.)
He wanted to talk about the
collusion of the "big, bad" oil companies in driving up prices
at the pump (I was, admittedly, wearing a Wisconsin
Badgers sweatshirt at the time, so I presume he was
thinking that I was a member of his March Madness college
basketball fraternity -- and, thusly, politically friendly to
his P-o-V).
Sparing you the details of
the dialogue: The summary belief of this very sincere,
educated man's opinions are that British Petroleum, Royal
Dutch Shell, Exxon Mobil, Chevron, etc: Must be (or should
be) in the "America 1st" category.
My amicable counter-argumentive
mention of China/India/Indonesia's role in the oil market
and commodities pricing was met with blank indifference, at
best. Why should they matter? We're America!
There's more here, but I
fervently believe this is a litmus test. Currently, Elliot
Spitzer may be resigning governorship and the Fed may be
printing off another $200 billion to 'lend' into the economy
(and save it for the next 60 days) but, the educated,
SUV-owning/suburban man-in-the street isn't really listening and
actually doesn't know to care at all. Today's gas prices
are far more important.
Ominous.
Do you see any look of surprise
on my face? The republicorps and the democorps haven't won:
the corpgov jingoists have! You're either with us or
against us! We're....ooops, getting carried away with the
programming there. All that remains is trying to stay free for
as long as we can and seeing what's coming, prepare as best we can
for what's logically follows...
---
Send snip and save and coping
ideas/discussions to george@ure.net.
--- end snip and save section ---
Around the Ranch:
Babies and Typoos
There I was, quietly minding my
own business - walking out to get the mail around noon Thursday -
when I noticed one of the goats ("Baby") laying down in a strange
place and licking...what's this? A newly born kid!
This was like one of those "Girl
didn't know she was pregnant" stories. Oh, we knew this one
was going to kid, but we thought more like two months from now.
I voted to name the female
Doester (as she has the small all brown coloring as Buckster, born
last Friday, but the naming committee overruled me. "Doester sounds
to un-feminine. I like Doeline." So that's what it is.
---
A large number of people wrote to
point out that I had missed the 'f' key a couple of times when
referring to linguistic shift in the Thursday report. An
unintentional typoo, I'm afraid. that'll teach me about
staying up past my bedtime to do radio interviews, LOL.
Thursday March 13, 2008
Lies &
Defaults, Do-Overs, and Handshakes
Now that
we've seen Spitzer Quits 'er, and with the banksters hounding
their own for payment, as in
the Carlyle Capital bailout talks apparently failing, everyday
reg'lar humans who don't have private jets, but who do know what the
price of gasoline from first-hand experience because they don't have
chauffeurs and Secret Service teams to pump it, are asking really
basic questions, like this one:
"Howdy...
Should I sweat my loosing credit
rating if the economy is going to collapse?.;0"
Tough one! There's no
reason not to ask this kind of question, though. After
all, Americans are thinking in droves that we may have
been lied to about (take your pick of as many as you want from this short list)
a) foreknowledge of the 9/11
b) attacks, the presences of
WMD's in Iraq, c) the status of Iran's nuclear program,
d) the soundness of our
currency/banking/trading/electrical/etc., etc., systems.
e) and the list goes on.
Worse, armed with even remnants
of moral training from our youth, there should be continuing concern
that the old saying "A fish rots from its head" could be applied in
any number of state capitols, as well as what we call the
District of Corruption. As Lee Iacocca asks, "Where's the
outrage?"
The workout of the debt (spun as
credit) dilemma is seen on sites like "You
Just Walk Away" and a host of tax site that question whether the
Income Tax is legit, and so forth.
---
I can't make those kinds of
decisions for you - I can only make them for me. I may not be
a good source of advice because grew up in a highly ethical home in
the 1950's and 1960's where divorce wasn't even discussed - people
in that time made intelligent choices, and like golf, you just
played it as it came. No do-overs in my families circle.
Today, wow! We scan
headlines like "Will
divorce become the norm in the future?" Based on the
numbers, that's a reasonable question to be asking. Something
deeper is going on.
From this, I infer that the
meaning of words like "commitment" have morphed in their meaning
over the past couple of decades. The Canadian Goose-like "mate
for life" concept is certainly toast, and along with that it should
come as no surprise that the concept of "commitment" being replaced
by "convenience" is popping up all over lifespace.
Amazingly, at least to me (the
guy with not enough coffee pumping yet) folks don't seem to take the
time to study the implication of such shifts in language which are
really manifestations of an archetype-level shift of thought.
It could be that I'm
hypersensitive because of trying to figure out what different of
concepts means in linguistic modelspace while trying to discern the
future. Still...
It's not like the word
"commitment" being functionally replaced by "convenience" is the
only shift along this path, either. It's happening with other
words in the language as well.
Take the word "default" for
example.
Thinking back on it, I can't
remember using the term until it started showing up in very early
(think
Vic-20 days) computer discussions where 'default' settings were
used. Then it slid over in my thinking to the money-brain
where it showed up in the 1990's increasingly used in financial
discussions. Then it spread to the internet stock
bubble/swindles to the point where "default" seems to just at us
from every turn of the Debt Crisis.
---
Comparing the headlines and a
little history, I'd argue that lies, do-overs, and defaults are
becoming a new global(ist) norm. "Bond
defaults to Increase in Europe as Loan Delinquencies Rise."
Yup, seems to be everywhere. Lies, do-overs, and defaults.
---
As we pull back the curtain a
bit, on the real 'inner workings' of the world - that level at which
design patterns become apparent -- it seems as though at
least one layer of the onion is exhibiting schizophrenic behavior.
We have, on the one hand, banksters, governors and even presidents,
touting their ethics, and then turning around and failing to meet
their own standards. And what happens? Do-Overs. A
public win & nod and "It's OK..."
So we get political dynasties.
Yet, while the PowersThatBe at
the top have been busily tightening up the loopholes to ensnare
'little people' with things like the bankster backed "Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005" to assure
their revenue streams, the same standards seem strangely
missing in the conduct of foreign affairs, wars, economics and
everyday business; the recitation of shortcomings would be hours
worth by itself.
Denial is thrust on us, too.
The PowersThatBe insist that
inflation is running (as of January 2008) at a 4.3% annualized rate
and that everything is 'normal".
We are taken as fools who can't
divide an old price into a new one, move the decimal point two
places to the right and behold the awful inflationary truth.
Worse, when it comes time to
elect new "leadership" the best and brightest seem conspicuously
absent from the corpgov-duopolistic slates. We're a choice of
status quo 'a' or status quo 'b'. Gee, what do you think is an
acceptable vote?
----
It's commonly understood that the
kind of thinking that got us into our current predicament won't be
the same thinking that will get us out of it. We're on the
verge of global collapse now, evidenced by a read of economics,
environment, ecological, or agricultural evidence, and that
waterfall sound becoming audible off yonder really is the edge of
the financial earth that we're about [linguistically] to go sailing
off.
Whether it's an attack on Iran
(May) or a big gob of something (terrorist/infrastructure failure/
economic crisis) or whatever that gob of dots in modelspace portend
around October 5th, it's shaping up to be larger than 9/11 was in
modelspace back in early 2001 is far ahead of the events.
--
Returning to the question at hand
though, ("Should you worry about your credit rating?") I'd have to
label that as a personal choice, but maybe helped along by the
headlines.
For example, if we read that
major corporations are about to recast their credit rating systems
("US
States Revolt Against Muni Credit-Rating System") the old saying
"What's good for the goose is good for the gander. If major
corporations can have their credit ratings whacked and survive,
maybe us regl'ar folks can, too.
When you
go search the news headlines for the term 'credit rating' you won't
find much about consumer's credit ratings. It's almost all
about the PowersThatBe and their proxy corps.
---
Before you run out and renounce
all of your debts, however tempting that may be, you might consider
the future of credit.
Once we sail off the
economic/social/and whatever 'edge of the world' this fall with
change that could be greater than 9/11 (which you'll admit I think,
changed everything about how we live) I would expect credit
to return to more of a one-on-one kind of relationship.
---
In the last Great Depression, a
much higher proportion of mortgages were made by sellers. A
person selling a piece of property would take a large down payment
(40% or more - enough to assure that the buyer would not just
walk away) and sellers carried notes themselves. The
aggregation of privately held mortgages into a whole industry was a
natural outgrowth of what had been individual practices.
In the coming Depression/Collapse
(or whatever it turns into) you might first ponder whether a 'credit
rating' will mean anything. If the power is out, the
ATM's shut down, the mortgage business in utter chaos,
currency collapsed, and martial law because of some calamity or
other, who's going to give a rip around an arbitrary computer
number? In that world a score of 780 would mean zip.
Perhaps, going in the positive
direction, we discover "free energy" and suddenly the "electricity
becomes too cheap to meter" dream we heard about in the 1950's and
early 1960's from the nuclear industry, were to really come to pass.
In that kind of a world, we'd likely all be chipped and you credit
score could be augmented by lots of other electronic 'scores' which
would establish your values as human chattel to the PTB/corpgov
elite. A sort of chipped-caste system of worker bees and
Rulers.
If your inclination is to say "as
above, so below" and take a hit on your credit rating like the
Powers are, it may (or may not) be of future significance, depending
on how the future arrives.
---
One thing I'm pretty sure of:
whether you end up living in a self-organizing collective (SOC) of
displaced people when Diaspora shows up, or a continuance of the
path we're now on, the one thing I would start being very careful of
is the meaning of your handshake.
In an earlier time, before
contracts were spewed in 50-page gobs from laser printers, the most
important thing a man (or woman) had was their handshake.
I expect in a time to come, the importance of a handshake will
return. It's not here yet, but give it time.
In a Land of Lies, Defaults, and
Do-Overs, the handshake and a look square in the eye remains
portable and durable, depending of course, on the kind of person
behind it.
Golden Gold
My broker JB called this morning
with the news a few minutes ago - hitting wires now:
Gold hits
recover over $1,000, oil above $110.
My deflationist pal will get his
bottle of win when the evidence of deflation comes along.
Wal-Mart, Chevron, and Big Dog Liquor up on 155 sure don't seem to
offer any evidence of deflation yet. And you know why, right?
Here's a hint:
The Memes:
Dying Dollar
No, the dollar falling below 100 Yen is not supposed to come as a
shock. On the other hand, it's just one more reason why
$115 oil may get here sooner than later. And a good chance of
$150 oil by mid-summer say the
time monks.
War
Drums/Banking
Source in the banking industry
tells me:
"•
Bank Added To OFAC List Treasury has designated Future Bank
B.S.C. in the Nonproliferation of Weapons of Mass
Destruction (NPWMD) category for being controlled by Iran's Bank
Melli and added its name to the SDN List. Information regarding
the bank has been posted on the BOL OFAC page. "
OFAC = Office of Foreign Asset
Control. U.S. persons are not allowed to do business with any of
the entities on OFAC’s 322-page list.
First the “no-nukes” admiral has
“resigned,” now this. War drums have resumed, no?"
Who Needs
Science?
The EPA has announced a modest
tightening of smog standards. Sounds fine, but in the process
they
decided to go against the unanimous advice of their
scientific advisory panel. Science calls for a stricter
standard...
Grand Theft
Merger?
Electronic Arts is trying to buy up Take-Two (Grand Theft Auto).
GTA IV is due at the end of April.
---
Don't even ask if it will run on
Vista, I've been getting enough email and ribbings on that OS
as it is. I'm still planning to hold out for V SP1 which I
think ought to remained Vistahorn for the new kernel, but that'd be
a marketing nightmare. Still, renaming Vista to something else
would make sense to me. Call me a slow learner, if you must.
Southwest
Cracks
38 of Southwest Airlines 737 are grounded for fuselage inspections.
Food Price
Fallout
One can't help but notice that
Nestle (largest food company in the world) is expected to beat its
own sales forecast thanks to raising prices. Like you
wouldn't have noticed at the toll house...I mean supermarket.
World of
Denial
A genuine cynic might be tempted
to take note of the
India police arresting Tibetan Independence Marchers and connect
that with how with the Beijing Olympics coming, world diplomatic
circles are too busy to notice. Bread and circuses must be
presented, eh?
The Runs:
Foot in Mouth
Geraldine Ferraro is out of the
Clinton campaign because, as one headline puts it,
"She said Obama 'lucky' to be a black man."
Thanks Jeff
Thanks to Jeff Rense (www.rense.com)
for a fine interview with Cliff and me last night. We keep a
low key mostly, but yes, that really is Cliff's last name...
---
A little sleep deprived, we'll get
back to Coping and Around the Ranch tomorrow. Meantime,
another shot of joe please?
Wednesday March 12, 2008
Landry's
Rally, Right on Schedule
This may turn out to be "I Told
You So Month". "And why would that be?" you're thinking.
It would be total tactless and
immodest of me to say "Told you so!", but have I, or have I not been
telling (those with little faith) that at least in the short term,
I've been expecting a real barn burner of a rally until perhaps
early-to-mid summer, and then a once in a lifetime chance to pile
onto the short side of things and make what my kids would call 'mass
bank' as we sail off the edge of the financial end of the world this
fall?
I sent an email to colleagues and
friend (I have one) yesterday with the subject line "Most Important
Email of the Year?" and here's the gist of it:
"Well, it has finally
happened: Like the last lock in the tumbler, my trading plans
for the balance of the year have just been confirmed with the
very detailed technical picture presented by Robin Landry
(below, and with chart attached).
Essentially, it says that what I’ve
read as the “most probable” course from Cliff’s linguistic work,
has picked up necessary technical confirmation. The Cliff Notes
(pun intended) version of our personal trading strategy over the
balance of this year will go something like this:
1. Between now and the anticipated
fifth wave blow-off top which Landry envisions over the summer,
we will slide in and out of commodity options in grains. Not
only is world consumption in our favor, along with the new rust
outbreak in Asia/Persia that came out last week, but world
stocks are nearing lowest-ever levels and weather disruptions
this year will push humans ever closer to famine. 2. We will
stay out of stocks, even though a dramatic rally to 14,700 over
the next several months may indeed (and by Landry’s work will)
unfold. The reason for caution? Stocks generally far more
‘over-subscribed’ than are commodities. 3. Sometime in late
spring, toward the end of May/first weeks of June, we will roll
out of our long commodity options and will then slide into
massive shorts in key commodities. This doesn’t mean shorting
foods/cereals, nor does it man shorting the precious metals
(gold/silver). What it does infer is that our short positions
will be in the industrial metals whose use I think more likely
to experience a precipitous collapse over late Fall and through
Winter.
We don’t have any plans to unload
our couple of ounces of precious metals because systemic
collapse could be a harbinger of hard currency calls to come
(e.g. backed by silver and gold). Pricing of silver in excess of
$50 an ounce and gold over $3,000 may well be conservative
outlooks, given the short-term inflationary or stagflationary
pop.
The trick, of course, when we get
into the Big Crash in the Fall, will be to exit positions and
take up tangible ownership of good/property before the hard
lockup of the financial system (ala
the Bank Herstaat credit lockup in 1974) …but that’s a
problem to worry about closer to the end of the play.
Landry’s work confirms the track
I’ve been on since we started kicking this trajectory around
(and trading on) since last July.
Nice - and honestly almost
reassuring) to see it condensing so well out of the linguistic
fog into a well-documented (and highly tradable) circumstance.
As usual, this is NOT trading advice
– only my personal take on things and how I intend to trade it.
So is this the most important email
of the year? Should be obvious before Christmas. Promises to be
an interesting year.
Then with Robin Landry's kind permission, I
included his client advisory:
"Hi everyone,
It has been sometime since I felt circumstances dictated a need
for me to send out an update. I always felt that when the market was
heading up in a Bull market there was little need to express my
opinion. A rising tide raises all boats, as the saying goes. Now the
time has come to give my count and what I feel is ahead. It has been
said that Elliotticians all have an opinion and there own count due
to the subjectivity of their emotions and their environment. And
many times their Elliott Wave counts have disagreed dramatically.
For the past 34 years I have studied the Elliott Wave and learned
it mostly through Robert Prechter's (referred to below as RP) books.
www.elliottwave.com I
have also read Neely's book and don't really agree with his
approach. I may not be smart enough, or it could be that what I
learned from RP's books and the software created by Tom Joseph
(Advanced Get) have worked so well over the years I have not felt
the need to really study his (Neely's) approach further. The tools I
use to be objective in my count have worked better than any one
else's I have read over all these years.
I have been able, for the most part, to successfully avoid the
declines in 1987, 1998, and 2002. I say ,for the most part, because
not every client listened, but could not say I had not warned them
when the declines came. Most of them are now Discretionary accounts.
I have hedged in my aggressive accounts during the current
decline but for most I have kept to my long term models until the
count tells me the BIG Decine has really started. Many of the people
I send this to can verify what I say is true. I get no monetary gain
from writing these updates but do it solely to give my opinion as to
where we are in the current market, and hope to learn more from
others and hopefully help others learn also from my experience. I
have learned that no one knows it all and the more we share with
each other the more we get out of it. With that said, for the
benefit of many new advisors, who have requested to be added to this
list I will out line my count and when the plane lands in Orlando I
will update a chart to attach to this update. (inserted
for your convenience - G)

The count from the low of the Dow in 2002 has been more difficult
to reconcile with the characteristics of the waves as expressed in
RP's books that at anytime in my 34 years. Were it not for the tools
I use to verify the count I would have been wrong as many have been
over the years. This may be MY turn to be wrong because no one is
correct all the time.
I HOPE I AM, but the headlines we hear today are those I have
been expecting to hear and read when we approach this point.
Technical analysis is a continuous learning experience for me.
The chart attached to this message will show my count. It also
reconciles a problem I have with Gold, Oil, Silver and all other
commodities rising. These normally rise in the 5th wave and mark a
top, but so far the commodities have yet to break.
I believe that break will come after a final 5th wave surge to at
least 14700 in the Dow and then the markets will all break down
together. IF my count is correct then the resulting decline will
make the decline in 2000-2002 seem like a picnic. That is why I am
writing this update.
I want to warn advisors that the hold for the long term will kill
their clients just when Boomers are starting to retire and cannot
afford to hold for the long term. That is why I believe the biggest
problem with the investment community today is that they rely on
fundamentals alone. Not enough time has been spent educating the
advisor the various ways to hedge their clients portfolios. That is
like trying to play scratch golf without a full set of clubs. Tiger
Woods and a few other may be able to do it but 99% of us can not.
With all the new investment vehicles available today it seems
only prudent to learn and use them to not only safeguard the clients
assets, but possibly save you from litigation, if I am correct in
what I see ahead. If my count is wrong then, RP's count is my
alternate count and we are already staring into the abyss. I hope
his count is wrong and you still have more time to prepare. The next
rally should clear up the count if 10964 is not hit. If it is then I
will send out a new update with the various support levels below
before the end of this decline.
Finally I would like to say this is not to say that all the
planning tools we have available to use today are not useful. They
Are!!! I use them myself, but the best plan is no good if the
assumptions for performance fail. The use of Technical Analysis, in
addition to Fundamentals and planning tools in combination will, in
my opinion, help set you up several notches above your peers in this
business, especially in difficult times like we have experienced
since 2000 and likely to experience for several years to come.
As always questions and comments are welcome. "
Note: Robin's email is:
rlandry@allegiance.tv but he's traveling for a week and a half.
Of course,
the other folks who knew the rally was coming, and if the futures are
right, will extend a bit at the open this morning are the folks at the
Fed who threw $200-billion worth of gas on the fire with their latest
'money for nuthin' move I told you about in yesterday's
update.
---
Clearly,
the Fed is trying to buy time until the tax rebates hit in May and June;
as one reader observes:
Paulson headline- Tax Rebates To Give Economy Boost In Early May;
Stimulus Plan To Add "In Excess Of 500K Jobs" 10:50AM
Did this calculation: ~$150 billion divided by ~500,000 jobs =
~$300,000 per job.
Concluded that I'd like to apply for one of those jobs. Wonder if
I could telecommute?
While the
Fed's action may very well hold the Dow up until the rebate rally kicks
in (and we get the fifth wave pop Landry refers to, at least some media
headlines remind us that in a way, the rebates are as much a tax
compliance measure as a real rebate. Here's a
typical headline:
"Public must file tax returns for rebates". Sounds a bit like
strong-arming, doesn't it?
Whatever
your label, Pappy's old saying "You can only spend it once" comes to
mind. is always operative. Oh, that bring up this:
TV Madness
If you rush
out and buy a new HD TV set, rather than take advantage of the converter
box coupon offer from the federal government to keep your old set
working (an option no self-respecting spendthrift would even consider!)
then I guess you'll reap what you sow by year's end.
There is an
alternative if you're a thrifty/cheap/George-type: click over to the
government's https://www.dtv2009.gov/
site and sign up for a couple of converter box coupons. Each
family is entitled to two $40-coupons which go toward purchase of a
digital - to - analog converter box which we have to assume will start
showing up in stores - I just haven't been looking lately.
This is one
of those program, which like a certain computer operating system I could
mention, got off to a very rocky start. It seems to be
working now, however.
Is there a
hidden message from the Universe here? What does that tell you when a
government program can be fixed faster than a certain operating system?
I'm still gritting my teeth about the BSOD's of late.
Radio Madness
Cliff of
www.halfpasthuman.com and I
will be on the Jeff Rense show tonight from 7 to 10 Pacific time.
Listening online details are here:
http://www.rense.com/general57/notice.htm. We enjoy chatting
with smart people - and according to the model-of-the-model (MoM) which
does integrity checks on the rest of modelspace, the linguistics project
is supposed to gain some degree of notariety this year as it 'asserts'
itself...
---
Speaking of
linguistics: We running into the 'online/slow-motion feedback
problem again:
Igor here. I have found some huge sections of older 2008 reports
posted at over 100 forums. It probably started at a specific one XXX
and now it is all over the net. I have to adjust clif's filters for
each site in each language and it takes about 20 minutes per site
then I have to come back later and validate the spyders are taking
orders properly. This one incident will probably delay the next part
of the report by a day or two. If it continues to spread it might go
many more days.
PLEASE Don't post ALTA reports. Even old ones. As long as they
contain current memes we are tracking it screws us over when the
spyders hit it on line.
We figured
out back in either 2001 or 2002 that if people actually post
what's in the linguistics, then we end up sampling it again - so
everywhere that has an actual quote from a run ends up being put on a
spidering 'blacklist' and that eats up huge amounts of Igor's time.
It also effectively reduces the inputs that much, too. So please
cooperate by not posting, or if you have, removing them...
"Admiral's Off the Bridge"
In keeping
with "I Told You So Wednesday" here's another one: Have I not told
you that before the US starts bombing Iran (or before giving a
tacit green light to Israel to do so on our behalf) and perhaps with the
first use of nuclear weapons, that we'd see the departure of Admiral
William Fallon as the US Commander of Middle East forces?
I'm not the
only one with hairs on the back of the neck going up on this. A
typical headline: "Fallon's
Exit Provokes Concern on Path of Bush's Iran Policy". No kidding -
it sure as hell does.
---
My list of
great US military leaders is fairly short: Eisenhower and Schwarzkopf
head the list. William Fallon goes on that list because he has
done the right thing, in my book: Resisting the neocon war
cries and their accompanying "let's use nukes" mantra takes balls.
Despite the
"Admiral's off the bridge" future ahead, I'm proud as hell that our
country has (I hope it's not had) military leaders willing to
stand up to the "You're with us or against us" jingoists who live so out
of touch with reality that they don't know what gasoline prices are.
And that
gets us to...
Diesel Madness
Who would
have thought?
"Diesel fume particles 'can trigger stress' says a new study out.
No, youi
don't need to smell the fumes, though. Just try paying for the
stuff.
It's
set records on 18 of the past 19 days reports the NY Times in their
business sections this morning.
---
What to
know what the future price of gasoline is going to be? I think it
was an email from the folks over at
www.theoildrum.com that mentioned energy investment banker Matthew
Simmons's back-of-the-envelope calc: Take the price of crude, divide by
20 and that's where gasoline's going.
So,
with $110 oil, that would mean $5.50 gasoline. Not overnight,
of course, as long-term contracts have to end and be repriced, but over
the next 60-months, $5.50 gas is as predictable as...
Major Car Wreck
200 cars and trucks in a single accident? Wowser!
Spitzer Resists
NY York Governor Elliot Spitzer isn't bowing to calls for his
resignation. Hmmm...Bill Clinton didn't resign, did he?
The Runs: Obama..
...wins
Mississippi.
----- snip
and save section ---
Coping:
Criticism and Motivation
Once in a
while, I get an email that is critical but fairly so. Here's a
fine example:
"George,
I love you BUT---
You may be wearing Wal-Mart sneakers, but you aint ever been
POOR.
I have. Working 40 hours a week and any extra work I could get
and barely making enough money to pay BASICs (as in no cable no
phone no nothin) and had to do without FOOD. I lost so much weight
so fast (as in starving) that I had someone ask me if I had aids.
Thankfully that is far behind me now, but needless to say, food
hoarding er excuse me stockpiling is pretty much second nature to
me.
My point is that there are people out there that aren't going to
get their little survivalist retreat by skimping on starbucks
lattes, because they are barely surviving right now. Four or Five
thousand dollars is an impossible dream.
I also worked as a realtor's assistant in a small town outside of
Austin, Texas and I can tell you that it is unlikely that a person
is going to find the kind of property that you describe in any
location that is not remote for less than $100,000. The exception
would be a piece of property with an old (as in crapped out) single
wide mobile home. If you are really lucky the place has improvements
and the mobile home is considered to have NO value. This is because
even back in the day when credit flowed like honey Lenders HATED
these kind of properties and you paid really high interest (as in
non conforming loans). What I am hearing from people in the Real
Estate business is that any one with a credit score of less than 690
can't get conventional financing and a property like this isn't
going to go HUD.
There is a bright spot (sort of). You might be able to get owner
financing (because in the best of times these were difficult
property to sell). Still, you are going have a hard time finding
something. In the office I worked in we dealt sith people all the
time who had COMPLETELY unrealistic expectations about what they
were going to be able to buy and the availability of owner
financing. If you go the owner finance route I absolutely will
guaranty that you will be getting a property that is in some way
compromised.
PLEASE tell you readers that no matter how desperate they might
be NEVER NEVER NEVER enter into a real estate purchase that doesn't
include title insurance, a survey (or at least an existing survey
and you can definately locate the markers) and a deed . A contract
of sale doesn't mean squat. Most problamatic is that the "seller"
may not have clear title to the property or indeed any title at all.
I have seen the consequences when someone "bought" land, subdivided
it and the sold it CONTRACT OF SALE and then defaulted on their
loan. People who had "bought" this way and paid for their land had
NO TITLE and no claim to the property.
If there is so much as a puddle on the property check the flood
plain. (you can go to the county clerks office and peruse the
official maps) A hundred year flood plain does NOT mean it will only
flood every 100 years. I have seen properties in the 100 year flood
plain inundated three times in 5 years.
You also need to make sure that you aren't in some kind of
endangered species habitat as it will impact your use of the
property,
We also had a situation near us where ALCOA was going to strip
mine a HUGE area and oh yeah suck the water table dry. A reputable
realtor won't sell you a piece of property and not tell you
something like that but there are some out there who will
(especially sight unseen, George).
Fair comments - all except
the part about POOR.. We need to have us a discussion (and second
cup of coffee) about this "poor" stuff. Understanding "poor" is
really critical to your future.
The way I've got it figured,
poor is a malaise - a kind of disease - that settles over a person and
causes a special kind of blindness: It's a blindness to opportunity.
As long as you can spot
opportunities as they come along, you're not poor. Stop
looking for opportunity., though, and you've signed away your own
future. Poor is an attitude and attitude is
everything. Broke, on the other hand, is just a number.
---
I've got a pet theory that
says except for a certain few people who lucked out in the parent
department, almost everyone has a similar amount of opportunity that
will come along over the course of a lifetime. What matters is
first whether you recognize it and second, whether you have the courage
to act on it.
There's a lot of good
material out there that help in the 'recognize opportunity' and
'motivation' department of Life - much of it is free from public
libraries.
If you're willing to spend
just a few dollars, Earl Nightingale's "Direct Line" or "Start Here"
series are great starting points. In the library, you can find
classics like Napoleon Hill's "Think and Grow Rich" and a host of
others.
Don't get me wrong: I'm
not addicted to motivational materials, but I believe in them enough
that I will likely put a link up to some of my favorites at some point.
Motivational books, tapes,
CD's and videos can go a long way toward treating the "poor" disease and
instill in its place an opportunity-oriented mindset.
Consider yourself a human
computer having just two "modes" of operation. You have an
input mode and and output mode. Output modes are the
things you do that are commonly called "work". Dishes, driving,
mowing the lawn, shoveling snow, work work, and the like is your "output
mode".
On the other hand, watching
television, mindlessly surfing the web, reading, pointless music, radio
listening and so forth, could be generalized as input operations.
Few people treat themselves
like a massively programmable computer although I know a few individuals
who do.
Cliff, at HPH, for example,
doesn't listen to music: "I don't want someone else feeding
emotions into me," he explains. Me? I listen to music, but
it tends to be movie themes which are open-ended to the extent that the
emotions I bring to the listening experience are my own.
Another way to absorb/deeply
program yourself (deprogramming yourself from the poor disease)
is to take up a quest for the best inspirational poems you can find.
Two of my favorites are these:
"I bargained with Life for a penny, And Life would pay no more,
However I begged at evening When I counted my scanty store;
For Life is a just employer, He gives you what you ask, But once
you have set the wages, Why, you must bear the task.
I worked for a menial's hire, Only to learn, dismayed, That any
wage I had asked of Life, Life would have paid. "
(My Wage by Jessie
Rittenhouse)
A second favorite is called
"The Quitter" by Robert Service:
"When you're lost in the Wild, and you're scared as a child, And
Death looks you bang in the eye, And you're sore as a boil, it’s
according to Hoyle To cock your revolver and . . . die. But the Code
of a Man says: "Fight all you can," And self-dissolution is barred.
In hunger and woe, oh, it’s easy to blow . . . It’s the
hell-served-for-breakfast that’s hard.
"You're sick of the game!" Well, now that’s a shame. You're young
and you're brave and you're bright. "You've had a raw deal!" I know
— but don't squeal, Buck up, do your damnedest, and fight. It’s the
plugging away that will win you the day, So don't be a piker, old
pard! Just draw on your grit, it’s so easy to quit. It’s the
keeping-your chin-up that’s hard.
It’s easy to cry that you're beaten — and die; It’s easy to
crawfish and crawl; But to fight and to fight when hope’s out of
sight — Why that’s the best game of them all! And though you come
out of each grueling bout, All broken and battered and scarred, Just
have one more try — it’s dead easy to die, It’s the
keeping-on-living that’s hard. "
On reflection, I guess the
reader's right. I "aint never been POOR." I've been broke, though,
and felt that 'poor' disease coming on. Fortunately, it's
treatable, but only if one of your "deal points" with Life is owning
your own destiny. If it isn't, you've just signed up to be poor.
Next time you're really
backed into a corner and eating cornflakes because that's all there is
here's some simple advice: Choose broke. That's
fixable and it starts with a simple positive, expectant,
opportunity-oriented outlook. To paraphrase Nightingale: Those who have
high expectations out of life/Universe very often have them met.
---
Send snip and save ideas to
george@ure.net
--- end snip and save section
---
Tuesday March 12, 2008
Money For
Nothing Department
Quick...to
the printers! This just up on the Federal Reserve's web site
(emphasis added):
For immediate release
Since the coordinated actions taken in December 2007, the G-10
central banks have continued to work together closely and to
consult regularly on liquidity pressures in funding markets.
Pressures in some of these markets have recently increased
again. We all continue to work together and will take
appropriate steps to address those liquidity pressures.
To
that end, today the Bank of Canada, the Bank of England, the
European Central Bank, the Federal Reserve, and the Swiss
National Bank are announcing specific measures.
Federal Reserve Actions The Federal Reserve announced today an
expansion of its securities lending program. Under this new Term
Securities Lending Facility (TSLF), the Federal Reserve will
lend up to $200 billion of Treasury securities to primary
dealers secured for a term of 28 days (rather than overnight, as
in the existing program) by a pledge of other securities,
including federal agency debt, federal agency
residential-mortgage-backed securities (MBS), and non-agency
AAA/Aaa-rated private-label residential MBS.
The
TSLF is intended to promote liquidity in the financing markets
for Treasury and other collateral and thus to foster the
functioning of financial markets more generally. As is the case
with the current securities lending program, securities will be
made available through an auction process. Auctions will be held
on a weekly basis, beginning on March 27, 2008. The Federal
Reserve will consult with primary dealers on technical design
features of the TSLF.
In
addition, the Federal Open Market Committee has authorized
increases in its existing temporary reciprocal currency
arrangements (swap lines) with the European Central Bank (ECB)
and the Swiss National Bank (SNB). These arrangements will now
provide dollars in amounts of up to $30 billion and $6 billion
to the ECB and the SNB, respectively, representing increases of
$10 billion and $2 billion. The FOMC extended the term of these
swap lines through September 30, 2008.
The
actions announced today supplement the measures announced by the
Federal Reserve on Friday to boost the size of the Term Auction
Facility to $100 billion and to undertake a series of term
repurchase transactions that will cumulate to $100 billion."
File
Under: RalliesBought
Shades of
Irving Fisher
"Ure's gone 'up 'round the bend'
on this one," you're thinking as the first sip of coffee and the
'net chases off the cobwebs. "Who is Irving Fisher, and why do
I care?"
Irving Fisher was an economist (Yale PhD) and he was published for
things like his work on money and price levels.
He's also known for his famous
observation about the stock market, made just a few days before the
biggest crash (so far, but stick around a while) in the US stock
market's history. "Stock
prices have reached what looks like a permanently high plateau."
---
I remind you of Fisher because of
the headlines about today that sound eerily similar. Here's a
dandy assort of headlines around a single story:
"Economy weak but not enough for recession: report"
"Economists
see US avoiding recession."
"UCLA Experts don't buy recession."
Is Ure wrong, and the whole rest
of the (academic) world right? Maybe - but only till this
coming fall and winter. Here's why:
The
National Bureau of Economic Research is the qusi-benchmark in
determining what a "recession" is and they have gone to some lengths
to come up with a tight definition. Essentially, you have to
experience a decline in GDP over some period of time before a
downturn in the economy is anointed with the "R" word.
In fact, the NBER has a whole
committee process for looking at the numbers (largely government
produced) and discerning what's a recession and what's not.
They have also documented their "Recession
Dating Procedure" so that financial writers (like me, for
instance) won't use the term too loosely.
So, just what is a
recession?
"A recession is a significant
decline in economic activity spread across the economy, lasting
more than a few months, normally visible in real GDP, real
income, employment, industrial production, and wholesale-retail
sales. A recession begins just after the economy reaches a peak
of activity and ends as the economy reaches its trough. Between
trough and peak, the economy is in an expansion. Expansion is
the normal state of the economy; most recessions are brief and
they have been rare in recent decades."
It's here that we encounter one
of the fundamental issues with modern day economics; there's a time
lag.
The goal of this web site (and
the subscription-based companion www.peoplenomics.com) is to look
ahead at a reasonable expected path for the economy in the
future so that people can adjust their thinking, personal plans, and
perhaps even their investment strategies, in order to ameliorate
adverse impacts.
Economists, as a body, on the
other hand, being precise, although seldom in agreement, wait until
the GDP numbers (and a slew of other indicators) have been compiled
before admitting the the "R" word has been visited upon us.
Or, to simplify the though
process, around here I try to keep focused on whether that's a train
coming down the tracks that might smack us if we're standing on the
tracks. Economists, being fact/number driven sorts, wait until
the train wreck has occurred, see how many people were scrunched by
it, and if the sc4runchees add up to so many, then yes, it was a
train wreck. Or, the "R" word.
The time lags can be substantial
- and worse, misleading.
I'd offer the analogy to a
regional power outage. Think of a recession as the condition
where a whole region is blacked out. That's right, no lights,.
heat, or air conditioning anywhere. Economists, after seeing
the lights off regionally for some period of time (two or three
consecutive quarters ) would say "Aha! This is/was a
power outage [recession]!"
If you're trying to live a normal
human life, and keep the air conditioning, TV, lights, and microwave
working, the label long after that fact that this was a power outage
is relatively useless information.
Our analogy gets murkier,
however, if we experience a series of rolling blackouts. Like
the kind the California System Operator often imposes when
California has more demand that kilowatts to sell its end users.
San Jose might have no power for some period, and then Walnut Creek,
then Oakland, and so forth as the pain is spread around.
Observing these rolling
brownouts, our country's brightest financial minds would adjudge
there to be no power outage, per se, but we'd be in a period of
"power softness" - and the analogy to what's going on presently
comes into focus. Think of the Housing bubble collapse as a
blackout in one sector of the economy.
To carry the analogy a step
further, suppose that the power company was actually jacking up the
voltage to those parts of the region that were not presently blacked
out? This would be analogous to the economic distortions
caused by bailing out banks, mortgage companies, SIV's and
what-have-you's that would otherwise have failed had the voltage in
their neighborhood (a/k/a money for nothing) been jacked up.
---
In the end, I suppose it won't
matter whether what comes later this year and into next, and into
2010 will be labeled as a "recession' or 'depression' by those who
study such things. In the main, they're waiting for the train
wreck and it's aftermath, counting railcars on their sides, tipped
over engines, and that kind of thing, before saying for sure "Yup,
that's a train wreck, alright."
On the other hand, seeing where
(an even more importantly when ) the train wreck seems
likely, well in advance, presents a rich opportunity for some of us
to stock up on the goods that train was supposed to be carrying on
it's way to economic destiny.
Commodities,
Inflation Up
Crude oil futures rose to a record for a fifth day in a row - and
over $109 a barrel. My commodity options gain on the five
115 April calls I bought a week or two back was miserably small.
One has to look at the latest
forecast numbers from the International Energy Agency ("IRA
cuts oil demand forecast for U.S., developed markets") and
wonder if they're not seeing one of those recession-driven declines
in demand.
Oh, oh! There I go again,
talking about a recession that's not official, again.
---
On the other hand, sitting on a
few coffee call options in July and September seem to be bolstered
by the headlines that
"Consumers face a jolt as coffee prices turn frothy".
Music to my wallet.
---
In the grain options, I noted
word that "Kenya:
Spread of wheat disease sparks shortage fears"
And what's this?
The CBOT is increasing the daily price move limits of corn and the
oilseeds?
---
then we have the whole
undercurrent of inflation running amuck. It seems that
China's inflation rate has surged to 8.7% and much of it is
attributable to food prices, so I don't see any reason to be selling
any of my cereal options, or softs like coffee for a while.
Not only that, but it sets up the
expectation, at least by me, that goods coming in from China will
get a lot more expensive. And speaking of the balance of trade
wreck...
BOT Stable
Balance of
trade was a bit wider last month, but only by what amounts to
federal budget dust.
Another One
Bites The Dust
For a while, it seemed like Elliot
Spitzer would end up in whoever's democorp cabinet next year.
But, no,
thanks to a prostitution ring, Elliot Spitzer seems to have
become the latest example of "Do as I say, not as..."
Wall Street reaction here.
Israel's
Expansion
While we're in what amounts to a
30-day cooling down period (don't bet on it lasting) in Gaza,
interesting to note that the "UN's
Ban calls on Israel to halt West bank Settlement Expansion".
Bombistan
More than two dozen are dead and over a hundred injured in a pair of
bombings in Pakistan overnight.
Them Winds
We've been talking about the
unusual winds this year - here's another case of it - with near
hurricane force
winds whipping the British Isles and more on the way.
---
Folks in the midst of Tornado
Alley are preparing for what shapes up as a very bad year.
Take Kansas for example.
And you might want to
bookmark this page (and look
at the second chart down) as it's the government's reckoning of
how this tornado season is going compared with past years.
As I've been
saying since New Years, this could be a worst-ever kind of year
and it seems to be off to that kind of start. We just keep our
fingers crossed and hope to be wrong.
.
(No snip and save section due to
another Vista blue screen of death minutes before posting)
Monday, March 10, 2008
Dreams, Reflections, and
Rhymes
I spent a
little time while doing chores and mapping out the schedule for the
week ahead, wondering (in background) how many people are seeing the
present day resonance with events of 30-40 years ago? A reader
picked up on my Thursday comments and sends this:"
"You said,
"I'll map
rap as the new/reborn R&B. The Micro cars (Smart Cars) as the
new VW's So where's the Kennedy analog?"
* * Gee,
that's easy. All over the 'net, and on TV, people are calling
Obama the "JFK for this era." And JFK's daughter and brother
back him for President. So there ya go. "
Yup, just
bigger than life, isn't it? Perhaps the whole 'return to the land'
('re-ruralfication') movement really is the hippy/commune period
updated and retooled...
---
I promised
last week that I'd seek counsel on this dream, reflections, and
memories context from Trader Jim Goulding - an expert at how
Generations fit together in puzzle-like fashion: He graciously
sent this:
"I appreciate George’s mention [last week] of my generational work.
However, I must say that I simply follow the two gentlemen, Neil
Howe, and the late William Strauss (Strauss & Howe). They truly
opened my eyes to the recurring cycles in our society. I can’t
encourage people enough to read their books. I highly recommend,
The Fourth Turning.
I’ve taken a lot of their work and tried to put it into pictures and
relate it to economic cycles too. George linked my generations
page to his site in the article and here’s that link again if
you’re interested,
http://www.jamesgoulding.com/generations.htm
Once you get to that page, scroll down below the pix of their books and
you’ll see an article I wrote titled, Generational Theory. It
explains everything I believe about their work and much more.
...
Concerning George’s article, on Thursday, I agree wholeheartedly with
his assessment that we are seeing similar things from 40 years
ago. We are at a half Saeculum. This is a very important time,
for it’s a turning point. We are moving from a
3rd Turning (Unraveling/Fall) to a
4th Turning (Crisis/Winter).
Everything is in
place to allow it to happen, as it has occurred 7 times since
1435; Strauss & Howe’s book
The Fourth Turning unequivocally proves this. Many of
the things predicted in that book (written in 1997) have come
true already. That applies for their book
Generations, too.
Generations was written, in 1991.
If you want to be
convinced about the validity of their predictions, read the
chapter in Generations
titled, The Millennials
(b 1982-2003?) Everything they wrote about that
generation has come true. How did they know? They knew because
they discovered a cycle. The cycle works. And…we are in for a
societal cycle called Winter,
due-up anytime now.
My personal
prediction is it will begin, in 2010. George thinks we are in it
already. The point is not
when, it’s ‘What
are you going to do to protect yourself and your family?”
Because if it’s not here yet, then it’s coming very soon. That’s
why George does what he does and I do what I do. We are getting
the word out about something we feel passionately about.
Here’s a quick
graphic from Strauss and Howe’s book, The Fourth Turning
that explains the Turnings/Seasons
Turnings Explanation:
|
Each Turning represents the following |
1st Turning (High/Spring) |
2nd Turning (Awakening/Summer) |
3rd Turning (Unraveling/Fall) |
4th Turning (Crisis/Winter) |
|
"…an upbeat era of strengthening institutions and weakening
individualism, when a new civic order implants and the old
values regime decays. |
"…a passionate era of spiritual upheaval, when the civic
order comes under attack from a new values regime.
|
"…a downcast era of strengthening individualism and
weakening institutions, when the old civic order decays and
the new values regime implants. |
"…a decisive era of secular upheaval, when the values regime
propels the replacement of the old civic order with the new
one. |
In his article, George, wrote about replaying themes now that happened
40 years ago. In generational theory he’s eluding to the 2nd
Turning which took place 1964-1984, in America.
We are currently in a 3rd Turning/Fall, which began in 1984.
The last Fall was
1908-1929 and the last
Winter was 1929-1945. So, you can see why Winter
sends the proverbial shiver up generational theorist’s spines.
It makes complete sense to me that George would get the feeling that the
clock’s been turned back 40 years. That’s because we are on the
societal-fence between Turnings. We are moving from Fall to
Winter. Times they are a
changin’…again.
...
For the Silent generation (b1925-1942) they remember 1969 as their
Turning year. That’s the year that sticks in their minds as the
pivot point. Silents are a bit slow when it comes to noticing
things. The actual Turning took place in 1964 but this behavior
fits the Silent generation to a ‘T’. They are slow and
methodical.
The average age of a Silent, in 1969, was approx., 35. For GenX
(b1961-1981), today, it’s 36ish. Now, it’s GenX’s turn to feel
the change. They’ll feel it quicker though. That’s their
behavior pattern. GenX anticipates change, compared to the
Silents who wait for it to happen.
Xer’s can feel it coming. They know there’s something very negative
lurking around the corner, in this boomer (b1943-1960) led
Senate, Executive branch, and Congress. Xers only hope is that
the Silents on the Supreme Court keep things in balance as the
Boomers run wild destroying America’s foreign policy and
economic system. (Side note: How many presidents have there been
who were from the Silent Generation, b1925-1943? None. McCain
would be the first.)
I’ll leave you with this: Again, I ask, how did Strauss and Howe predict
so many things? Because they found a cycle. The cycle works and
you best get ready because
Winter is Coming.
Take care,
Jim Goulding
www.jamesgoulding.com
---
If you're
thinking this morning's first headline and first dose of brain food
for the week sounds a lot like the title of Carl Jung's
Memories, Dreams, Reflections, that'd just be a coincidence
--- or not.
Linguistics:
Right Noun, Wrong Verb?
Wow: I
am in complete awe of the linguistics work of Cliff over at
www.halfpasthuman.com.
He's been saying for almost a year that in Spring we would see calls
for 'early elections' and boy, has that ever popped out all over the
place. A check of Google's news search engine finds:
But, of
course, the most widespread phrasing associated with the early
election linguistic is the
potential for re-voting in Floridah (which earned that
deliberate spelling in political discussions after their
presidential fiasco) and Michigan.
Could it be
that modelspace cacked on a verb? Could this be the "early
election" controversy/MSM/mainstream media swirl that's been coming
for many months, or might we still see "calls for" early
elections coming to the USA and not just Serbia, India, South
Africa, and Fiji, and whoever else climbs on the meme? Murky
stuff, this...
The Runs:
Memeering Headlines
You know
what's fun? Not taking the elections too seriously because
they are, after all, little more than the proxies of the big
business consortium that President Eisenhower called the
military-industrial complex, but which has grow to include
pharmaceutical giants, banksters of all ilk, and the whole globalist
elite.
I thought it
would be instructional for a Monday to sit back and simply review
some of the verb-principal headlines to see what kind of impression
mere fragments of headlines seem to offer. I'll show you...
"Democrats
kick..."
"Clintons
push..."
"Obama
accuses..."
"Clinton
stakes claim..."
"Obama wins..."
"How Clinton camp justifies..."
"Is Obama a victim..."
Interesting,
is it not? The radical linguistics fellows could probably make
soup out of this, but the point this early in the day is just to
notice how the 'flavor' of such phraseology creeps into your thought
processes below your perception threshold unless someone draws your
attention to it. A dandy case of macro-programming of the
peeps in progress...
---
Come to think
of it, Politik USA is a special class of society-level
recursive macros, which as it continues to run,
concentrates ever more power in the hands of a ruling elite.
Splendid! Just what the Framers had in mind, I'm sure.
Short Takes Department
Bank Failure
A small bank in Missouri is scheduled to reopen after being
shuttered last week by the Feds.
---
Seems to me
the regulators don't seem to have much problem citing "financial
mismanagement" when it's a small bank...but they are strangely mute
when it comes to calling the foreign money bailouts and Fed printer
bailouts of big Money Center Banks what they are. It's the
same disease (greed) just packed in the ultra-jumbo-deluxe size.
Oh, right,
"too big to fail" makes them immune from such labels? Of course, how
silly of me...
---
So I just keep
watching the Bank-Implode-O-Meter
and the Mortgage Lender
Implode-O-Meter in shock that none of the layoffs ever seem to
show up in corpgov reports - which insist, among other things, that
there is still a construction industry and that home loans are being
made.
Hello?
You getting this? Dead banks walking...
Debt Call
Now we're reading that the Carlyle Capital margin call could whiz
past $400-mill. The way these stories come out, I'd guess
we'll hear $500 million by tomorrow or Wednesday...
No Grain, Much Pain?
Events
catching up to linguistics as the NT Times headlines "A
global need for grain that farms can't fill". The
linguistics boys are wondering why the PowersThatBe are
putting seed banks in order...do they know something we reg'lar
folks don't?
Posts De-Mapped
Google has managed to stir up a little concern in the Pentagon.
We'll keep you...er....posted.
Reverse Mortgage
Warnings
Sounds great
on the surface...sell your house, get money, live in it till you
die.
But,
as NPR is reporting, there's a growing fraud problem about...
Gee...fraud...how about that?
Bordering on Civil?
Hugo's there at the border Chavez has reopened diplomatic ties with
Colombia.
Extreme Weather
Midwest cleans up after a crappy weekend. And this morning
we've got a line of thunderstorms which might stir up tornado alley
later in the week.
---
Meantime, I
can't help notice that the "Global Warming" crowd is not taking
kindly to headlines like this one:
"Climate Skeptics Reveal ‘Horror Stories’ of Scientific
Suppression."
It's OK, I
understand why: No global warming would mean no carbon credit
trading and gosh, what about all those conferences and causes?
No thanks. I'll just let the two sides duke it out and cover
all bets with more winter clothing when it goes on sale this spring
(we will have a spring, right?) and an extra bottle of twelve of SPF
2000. Have fun.
Superman's Glasses?
A new kind of surveillance camera can see through clothing. I
see...
Markets:
Oh Goody!
"It's
so much worse than you think" opines Richard Gibbons.
Friggin' great.
I wouldn't say
that - and I have penciled in a 'bounce' floor for Peoplenomics
subscribers in the ChartPack this week. But really, how bad is
it? The Employment situation maybe looks a little weak, and
oh, so what if home equity is under 50% and the lowest levels since
1945 - that's last week's "news"
What we have
to look forward to this week is the Trade Imbalance tomorrow and the
CPI(fairytale) figures on Friday, which won't mean a damn thing
because policymakers don't eat or use energy: They mutter
"core rate" ignoring food and energy and proceed to do what they're
quite good at: solving the wrong problem by promoting off shoring of
jobs and the whole lot of it while resolutely and straight-faced
telling us of the Strong Dollar myth.
---
Lately,
when I look at
the shadow M-3 rate over at Trader Bart's site, and see it's now
north of 18%, I look at the grocery receipts Elaine brings back
from shopping and hear her comments.
"See this can
of chicken broth? It was 88-cents two weeks ago," she informed
me. "Now it's a dollar."
OK, what's a
little 13.6% inflation in two weeks?
Still, this
week's government figures will be another chorus of the band playing
on as we live out the financial version of Titanic. Enjoy the
last dance.
--- snip and
save section ---
Coping:
Silly Time
I assume you've seen the stories about how Daylight Time doesn't
really save energy? As if we need daylight savings time to
screw up our lives - most of us (and
a good portion of the UK) are already suffering some form of
sleep deprivation due to money worries. So as long as we're
all up, let's just stay and work for more for corpgov!
---
I don't want
to sound overly cynical here, but maybe this is the best CONgress
can do to invent a new industry. I'll admit it's a little
better than war, for sure. And, it does mean plenty of work in
software departments changing code.
But, as long
as they are going to be messing about with time, why not just have
random changes of time? It already happens to me -- plenty.
I run out of time for this, or there's not enough time for that.
While I don't think we need government messing with clocks, I'm sure
there's a Time Lobby somewhere that pushes such things.
---
Send snip and
save ideas/comments/ ways to get along better in life to
george@ure.net.
--- end snip
and save section ---
Around The Ranch:
The Kids
Its early and
I haven't been out in the pouring down rain yet to look in on the
boy-girl goat twins born to Nan(cy) Goat on Friday afternoon.
(Pictures coming).
Elaine has
named them: The all brown boy goat has been named "Buckster"
and his female wombmate has been named "PlayDoe". Being
exceptionally smart critters, the kids quickly figured out that the
black plastic feeding pans warm up in the sun and provide a
first-class snoozing area:

The most
interesting thing about the Boer goats is that they seem to have
personalities that are almost like dogs. They seem to be
easily trained, have a good sense of play and curiosity. Best
of all, they're pretty much self-tending and they're not asking for
an allowance or cells phones...yet.
News from Elliott
Wave International
Chart of the
Week!
An
explanation of this chart
Once upon a
time, a long while ago, I observed during my quest for 'truth' in
economics, that the powers That Be, the talking heads on the teeve, and
the other information sources that actively engage in the programming of
humans not to think, had conveniently swept several trillions of dollars
that disappeared in the Internet Bubble's bursting (since spring 2000)
under the rug. Surely, it wasn't unnoticed by the thousands of
people who called brokers and said "Where is my money?" "Gone, but
hang in there as you're a long term investor!" was about all they heard
back.
But, the truth
of the matter is that this chart shows what your account would look like
if you have taken a few thousand dollars and invested equal amounts in
the Dow, the S&P 500, and the NASDAQ Composite in the waning days of
1999. It's not a very pretty picture, and it sort of gives away
the other side of the story. You know, the one that no one has an
interest in telling, because it's a truth which shows the amazing
coincidence of the timing of 9/11, the disappearance of naked shorting
evidence and all, along with the impact of The Wars which have managed
to keep the economy out of an earlier depression than the one expected
by me by late 2008.
No, it's not a
perfect replay of 1929, but history doesn't repeat exactly, it
only rhymes. So think of this as the rhymes and the crimes chart:

Write when you
get rich,
George Ure,
The People's Economist
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